Parexel International Corporation
), a leading provider of biopharmaceutical services, recently
announced that it has inked an Accelerated Share Repurchase (ASR)
agreement with J.P. Morgan Securities LLC, an agent for JPMorgan
Chase Bank, National Association to buyback an aggregate of $50
million of its common stock.
The ASR is a fragment of Parexel's share repurchase program
announced on August 8, authorizing the company to buyback up to
$200 million of its common stock. The share repurchase program
received the approval of Parexel's lenders on August 17. The share
buyback will reduce the number of shares outstanding which stood at
60.1 million as of June 30, 2012.
The company intends to fund the ASR and other open market
purchases with its existing cash on its balance sheet, cash flow
from operations, credit facilities as well as other financing
activities. Parexel exited fiscal 2012 with cash and cash
equivalents of approximately $214 million and available credit of
Per the ASR agreement, Parexel will procure roughly 1.3 million
shares at the commencement. The final settlement, based on the
volume-weighted average price of the shares, will resolve the
aggregate number of shares under the ASR agreement.
ASR will hasten the share buyback program and promptly reduce
the number of outstanding shares at a fixed cost. Management
believes that the ASR is an important opportunity to improve
Parexel's capital structure. The repurchase of shares will increase
Parexel's shareholder value in the long run. The announcement is
not only expected to reinforce shareholder confidence, but also
boost the market value of the outstanding shares.
Waltham, Massachusetts-based Parexel is a leading
biopharmaceutical services company. It provides clinical research,
consultation and commercialization as well as technology products
to various industries such as pharmaceutical, biotechnology and
medical devices. The company operates in three major segments -
clinical research services, Parexel consulting and medical
communications services and perceptive informatics. It competes
) among others.
Parexel currently retains a Zacks #2 Rank, which translates into
a short-term Buy rating.
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